Virgin Media has blamed an "administrative oversight" for the warning labels that appeared on letters sent to its customers that suggested their internet service would be terminated because of illegal file-sharing.

The broadband service provider sent about 800 letters to its customers warning them that they should not download music illegally from the web. Each envelope carried a large red sticker in the top left-hand corner that said: "Important - if you don't read this, your broadband could be disconnected".

The letters began: "We're writing to you about downloading and sharing of copyrighted files on the internet. That's because we've received a report that copyrighted music has been shared using a computer linked to your Virgin Media internet account."

Virgin Media said that the letters were part of an "educational" campaign it was running in association with the music body the BPI, which represents record labels.

It said that the wrong stickers had appeared on the envelopes, and that the company had no intention of cutting off users. It also said that the stickers would no longer be used on letters sent out to Virgin subscribers.

"This is about education. We make no assumptions about who is at fault, " said a Virgin Media spokesperson. The internet service provider also confirmed that it would not pass on the names of customers who received letters to music organisations such as the BPI.

According to a recent study by music body British Music Rights, almost two-thirds of 14- to 24-year-olds in the UK said they had shared music files on the internet using peer-to-peer networks such as Limewire and BitTorrent. Of those surveyed, 42 per cent admitted to allowing friends to make copies of music they had stored on their computer.

The music industry is trying to persuade the government and internet service providers to clamp down on music piracy and illegal file sharing. Sales of physical CDs have been in long-term decline, and the music industry believes that illegal file-sharing is at least in part to blame for this.

Internet service providers have been given until early next year to come up with ways of combating online music piracy, or the government will pass new laws to demand they take action against offenders.

Virgin Media is not the first internet service provider to send its customers warning letters. Both BT and Tiscali have also sent letters to people they believe are using the internet for illegal file sharing.

However, the chief executive of Carphone Warehouse, Charles Dunstone, has refused to follow suit, arguing that it turns internet service providers into gatekeepers for the web. "We do not control the internet, nor do we control what our users do on the internet," said Mr Dunstone.

"As part of its campaign against piracy, the BPI asks internet service providers to pass on information about illegal activity, such as file sharing, that customers are engaged in. The BPI uses peer-to-peer networks to capture evidence of illegal file sharing, and then hands that on to ISPs, who may then choose to send an advisory letter to the customer."

"We believe that internet service providers, far from being a simple 'pipe', can become significant distributors of digital media, and share in the tremendous value that would be unleashed if more music were accessed legally online," said the BPI in a statement.

The BPI estimates that more than 6.5 million people in the UK illegally access and distribute music each year.